California Life Accident and Health Insurance Final Exam
160 Questions with Verified Answers
What distinguishes a deferred annuity from an immediate annuity? - CORRECT
ANSWER The time at which benefit payments start
Cindy buys a 10-year certain annuity with an installment refund. After receiving
monthly payments for 5 years, Cindy dies. How many remaining payments will the
insurer make to her beneficiary? - CORRECT ANSWER 60 payments
What is a common reason people purchase an annuity? - CORRECT ANSWER To
protect against the risk of outliving their financial resources
What kind of annuity pays income to two annuitants until their deaths? -
CORRECT ANSWER Joint and survivor annuity
What is a joint and survivor annuity? - CORRECT ANSWER Provides payments the
annuity to two people. If either person dies, the same income payments continue
to the survivor for life. When the surviving annuitant dies, no further payments
are made to anyone.
Victoria owns a life annuity and elects to receive annuity payments monthly for
the remainder of her life with "ten years certain". Her annuity will make payments
- CORRECT ANSWER for a minimum of 120 months and a maximum of the
remainder of her life
Which of the following statements regarding a life insurance policy dividend is
TRUE? - CORRECT ANSWER It is the distribution of excess of funds accumulated by
the insurer on participating policies.
An insured owned by its policyholders is called a - CORRECT ANSWER mutual
insurer
, An insurer enters into a contract with a third party to insure itself against losses
from insurance policies it issues. What is the agreement called? - CORRECT
ANSWER Reinsurance
What is reinsurance? - CORRECT ANSWER An arrangement by which an insurance
company transfers a portion of a risk it has assumed to another insurer
Which of the following is NOT a characteristic of reinsurance? - CORRECT ANSWER
Increases the unearned premium reserve
Which of the following is a contract that involves one party which indemnifies
another when a loss arises from an unknown event? - CORRECT ANSWER
Insurance policy
What is an insurance policy? - CORRECT ANSWER A contract where one party
promises to indemnify another against loss that arises from an unknown event
What is residual disability income insurance payments based on? - CORRECT
ANSWER The amount of the insured's income is reduced by the disability
Manuel is considered to be a disabled person as defined by the Americans with
Disabilities Act (ADA). As such, he is unable to perform any of the following life
activities EXCEPT - CORRECT ANSWER Driving
Which of the following is NOT a provision in a disability income policy? - CORRECT
ANSWER Deductible and coinsurance provision
Which of these statements is NOT true concerning recurrent disabilities? -
CORRECT ANSWER The insurer continues coverage after a new elimination period
Kim is insured under a disability income insurance policy with an "own-
occupation" clause. She was recently injured in an automobile accident and can
no longer perform the tasks of her job. Kim is now considered to be - CORRECT
ANSWER totally disabled
What percentage of eligible employees must participate in a noncontributory
group health plan before it can be put in effect? - CORRECT ANSWER 100%
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